Program Participation under Means-Testing and Self-Selection Targeting Methods

Using data that enables us to distinguish between the different components of
program participation (i.e., knowledge, application, and acceptance), we investigate the
determinants of household behavior and program implementation in a social safety-net
program that combines administrative and self-selection targeting methods. High
undercoverage of eligible households primarily reflects lack of knowledge and binding
budget constraints in poor areas. High leakage to ineligible households reflects the
combination of their high levels of knowledge, application, and acceptance. Lowering
undercoverage will require greater program awareness among the poor living in nonpoor
areas and this is likely to come at the expense of substantial leakage to the nonpoor unless
improvements are made to the verification process. Our results also suggest that in the
presence of a budget constraint, the administrative selection process gives priority to the
poorest households and those with children.